Looking to help provide a higher quality service at lower costs
for Medicare patients, three local hospitals owned by Hudson Holdco have been
approved for a "bundling" payment program.

The program, started last year by the federal Centers for
Medicare and Medicaid Service, aims to have health care providers work together
by rolling all bills incurred during certain hospital visits into one charge.

By forcing the mutual effort between hospitals and physicians,
there is a strong incentive to better coordinate evidence-based care in
order to eliminate unnecessary costs while improving quality outcomes,
according to Bayonne Medical Center CEO, Dr. Mark Spektor.

"We want to be one of the leaders that is developing
programs that would provide high quality care at a lower cost," Spektor
said. "This is beneficial for the (companies and) for the patient and the
payers."

The pilot program at Hudson Holdco's hospitals -- Bayonne
Medical Center, Christ Hospital in Jersey City and Hoboken University Medical
Center -- will be focused on the group's congestive heart failure and chronic
obstructive pulmonary disease programs, Spektor said.

According to Spektor, the group chose those two diagnoses
because of the frequent care needed to treat patients, high costs and the high
volume of cases in the hospitals.

"When you're talking about (the amount companies will
save), setting even a 5 percent reduction could be worth millions of dollars in
savings," Spektor said today.

Spektor said that the group went through a lengthy application
process that including providing data and multiple applications over a few
months before they were accepted into the program. CMS, which runs the program,
has not yet determined how long the program will run, Spektor said.

"We are pleased with the confidence CMS has in our cost
reduction and improved outcomes initiatives by accepting us into this
program," he said.

The
program, which has been instituted in other New Jersey hospitals such as
Morristown and Overlook Medical Centers, could be implemented into Hudson
Holdco's hospitals by the end of this year, he said.